Offshore Wind Power Plants The Road to Subsidy-free Offshore Wind

Transcription

1 Offshore Wind Power Plants The Road to Subsidy-free Offshore Wind CEM8: Multilateral Solar and Wind Working Group side event Matthias Bausenwein General Manager Asia-Pacific June 2017

2 DONG Energy at a glance Headquarters in Denmark 6,200 employees (including Oil & Gas) Revenue in 2016 DKK 61.2 bn EBITDA in 2016 DKK 19.1 bn Phase out the use of coal by 2023 Wind Power Develops, constructs, owns and operates offshore wind farms in Denmark, Germany, the Netherlands and the UK. Development projects in Taiwan and the USA Bioenergy & Thermal Power Generates and sells power and heat to customers in Denmark and Northwestern Europe Oil & Gas * (discontinued operations) Produces oil and gas from fields in Denmark, Norway and the UK Distribution & Customer Solutions Power distribution grid on Zealand and sale of power and gas to customers in Northwestern Europe * On 24 May 2017 DONG Energy entered into an agreement to divest its upstream oil and gas business to INEOS. This corresponds to the entire share capital of DONG Energy E&P A/S for an unconditional payment of USD 1,050 million (DKK 7 billion) on cash and debt free basis. DONG Energy will retain all cash flows until 30 June

3 DONG Energy Wind Power overview DONG Energy Wind Power geographical footprint USA Boston office Europe Bay State Wind Asia Pacific Taipei office Unparalleled experience and track record Ocean Wind Formosa 1.1 Formosa 1.2 Greater Changhua projects 25+ years of experience and track record in the offshore wind sector Walney Extension West of Duddon Sands Isle of Man Barrow Burbo Bank Ext. Burbo Bank Anholt Walney 1 & 2 Westermost Horns Rev 1 & 2 Middelgrunden Avedøre Rough Hornsea 1 Hornsea 2 & 3 & 4 Vindeby Race Bank Nysted Gode Wind 2 Lincs Gode Wind 3 & 4 Gunfleet Sands 1 & 2 Gode Wind 1 Borssele 1&2 Borkum Riffgrund 1 Gunfleet Sands 3 Borkum Riffgrund 2 London Array German Cluster 22 offshore wind farms in operation 3.8 GW Constructed capacity 2,000 Dedicated employees 6 offshore wind farms under construction 3.6 GW under construction In operation Under construction Under development 7.7 million Europeans with clean electricity 3.5 GW World's leading operator 14 Partnerships Decommissioned after 25 years 2

4 Offshore wind power is a large scale renewable technology with growth rates exceeding other renewables Fastest growing renewable technology in OECD Installed capacity CAGR, % Offshore wind power offers multiple advantages Offshore wind 25% Utility size power generation 659 MW Walney Extension will power more than 460,000 UK homes Solar PV 1 14% Offers +45% capacity factors 2 Significantly higher than onshore wind and solar PV Onshore wind 7% Rapidly declining cost Industry maturity, volume and technological development reduce LCoE 3 Hydro 0% Limited visual impact on landscape Wind farms are built far from shore Source: Bloomberg New Energy Finance (BNEF) 1. Sum of utility-scale PV and small-scale PV 2. Capacity factor is a performance indicator measuring to what degree a wind farm has produced according to the farms capacity (actual production / (capacity x hours in period)) 3. According to BNEF, long-term offtake price required to achieve a required equity hurdle rate for the project 3

5 Utility scale: Wind power plants are getting bigger and bigger 5MW 50 MW Pre-2009: Project by project Examples Post-2009: Industrialised approach to planning and execution of offshore wind projects Vindeby Horns Rev 1 London Array Hornsea 1 First offshore wind farm in the world First large scale offshore wind farm in the world The largest operational offshore wind farm in the world The world s largest offshore wind farm once constructed 5 MW 160 MW 630 MW 1200 MW Turbine capacity: 0.45 MW Turbine capacity: 2 MW Turbine capacity: 3.6 MW Turbine capacity: 7 MW Nr. of turbines 11 Nr. of turbines 80 Nr. of turbines 175 Nr. of turbines 174 Rotor diameter 35 m Rotor diameter 80 m Rotor diameter 120 m Rotor diameter 154 m Distance to shore 1.8 km Distance to shore 18 km Distance to shore 20 km Distance to shore 120 km 4

6 Load factors above 45% and high wind predictability make offshore wind a stable source of power, with low integration costs Internal use Grid and balancing costs in Germany USD/MWh Offshore wind produces in almost all hours Duration curve, Denmark Transmission Distribution Balancing 100% 80% 60% 40% 20% 0% Offshore wind produces in 98% of all hours Solar PV Onshore wind Offshore wind Hours in 2015 (total 8,760) Offshore wind percentage of hours with wind speed below 3m/s Utility scale PV Onshore wind 0 Offshore wind Solar Storskalig & onshore sol PVwind impose Landvind significant costs on distribution Havsvind grid 5.2% 5.4% 3.9% 4.4% While wind energy content (i.e. how windy a year is) varies year to year the wind s energy content is remarkably stable - Over the past 33 years annual variations have not West exceeded UK the average East UK value North by more West than DE +/-10% West DK Source: Agora 1. While wind energy content (i.e. how windy a year is) varies year to year the wind s energy content is remarkably stable - Over the past 33 years annual variations have not exceeded the average value by more than +/-10% 5

7 Breakthrough in Offshore Wind in Germany Cost Drivers Enabling the first Zero-Subsidy Bids (1/6) 6

8 Breakthrough in Offshore Wind in Germany Cost Drivers Enabling the first Zero-Subsidy Bids (2/6) 7

9 Breakthrough in Offshore Wind in Germany Cost Drivers Enabling the first Zero-Subsidy Bids (2/6) Higher accessibility Minimizing non-productive time Lean setup through shared infrastructure 8

10 Breakthrough in Offshore Wind in Germany Cost Drivers Enabling the first Zero-Subsidy Bids (3/6) 9

11 Breakthrough in Offshore Wind in Germany Cost Drivers Enabling the first Zero-Subsidy Bids (4/6) 10

12 Breakthrough in Offshore Wind in Germany Cost Drivers Enabling the first Zero-Subsidy Bids (5/6) 11

13 Breakthrough in Offshore Wind in Germany Cost Drivers Enabling the first Zero-Subsidy Bids (6/6) 12

14 Offshore wind shows rapidly declining costs for society Levelised costs for society of electricity, incl. transmission costs EUR/MWh 1, 2016-prices, (bid) announcement year Walney Extension 2014 Race Bank 2015 East Anglia 2015 Borkum Riffgrund 2015 Horns Rev III 2015 Borssele I & II 2016 Kriegers Flak 2016 Borssele III & IV 2016 Cluster Sources: DECC; Danish Energy Agency; Energinet.dk; NEV (Dutch Energy Scenarios), Bundesnetzagentur 1. Levelised revenue (price) of electricity over the lifetime of the project used as proxy for the levelised cost to society. It consists of a subsidy element for the first years and a market income for the whole lifetime. Discount rate of 3.5% used to reflect society s discount rate. Market income based on country specific public wholesale market price projections at the time of contracting where available else an average of 5 analytics is used. For comparability across projects and because there is no transparency round the TSO costs of transmission a generic scope adjustment (incl. transmission and extra project development costs) have been applied. Due to the specific DC transmission set up in Germany cost estimates from the Offshore Netzentwiklungsplan 2017 have 13 been applied.

15 Discussion & Questions